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First home buyers return in droves

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James Mitchell 5 minute read

The proportion of first home buyers in the mortgage market hit a three-year high in June, according to the Australian Bureau of Statistics (ABS).

The latest ABS housing finance figures show that the number of first home buyer commitments as a percentage of total owner-occupied housing finance commitments rose to 15.0 per cent in June from 14.0 per cent in May 2017.

Between May 2017 and June 2017, the average loan size for first home buyers fell by $600 to $317,400. The average loan size for all owner-occupied housing commitments fell by $3,800 to $376,200 for the same period.

The number of first home buyer commitments increased by 1.6 per cent for the month, following a 28.9 per cent increase from the previous month, and is the highest since October 2014. 


REIA president Malcolm Gunning said: “By contrast, the value of investment housing commitments decreased by 0.9 per cent in June, in trend terms, following falls in the previous two months, and is well down from its 2015 peak.”

He added: “Overall, the figures for June 2017 show, in trend terms, that the number of owner-occupied finance commitments decreased by 0.2 per cent. If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments increased by 0.3 per cent and is the 10th consecutive month of increases.”

Mr Gunning said that the lending figures reflect that the market is adjusting, with owner-occupiers and first home buyers returning to the market as investor activity decreases in response to the actions of the regulators and banks to limit bank lending to dampen investor demand for property.

Brokers have also started to see a pick-up in FHB activity, which is expected to continue following the introduction of state and federal government initiatives on 1 July to improve housing affordability.

Mortgage Choice’s latest Loan Purpose Report found that first home buyers accounted for 14 per cent of all loans written by the company in April, up from 12.2 per cent in January.


“In the first quarter of 2017, we saw a rise in the number of first home buyers taking out loans through Mortgage Choice,” Mortgage Choice chief executive officer John Flavell said.

“This growth in first home buyer demand can be attributed to a number of factors, including low interest rates, stagnating property price growth and enhanced first home buyer incentives.”

[Related: Government grants and low rates attract FHBs]

First home buyers return in droves
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James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.



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